Employer Liability Insurance Act

Insurance covers worker s job-related injury or illness in the U.K.

The Employer Liability (Compulsory Insurance) Act of 1969 in the United Kingdom was created to meet the cost of compensation in the event an employee is injured or suffers an illness.

Exceptions

All employers are required to invest in this type of insurance, with a few exceptions; owners who are the sole employee of a limited corporation are exempt, as is an individual who owns at least 50 percent of the share capital in the company. Businesses who only employ close family members are also exempt from the mandatory coverage.

Coverage

The insurance covers compensation for the cost of injuries and illnesses suffered by an employee as a result of their work--be it on, or off, the work site. In some instances, employees injured in a traffic accident may be covered by the company's motorist's insurance. Most public and governmental agencies are exempt from the law, providing compensation from public funds instead.

Fines

Britain's Health and Safety Executive (HSE) possesses the power to fine a business as much £2,500 per day in the event a company fails to retain the coverage.

"The minimum level of coverage required is £5 million, which includes costs," writes the HSE. "In practice, most insurance companies provide coverage of at least £10 million."

References

• Health and Safety Executive
• Her Majesty's Stationery Office: UK Legislation